Boligkreditt

Note 1 Accounting Principles

1.1 Basis for preparation
SpareBank 1 Boligkreditt AS is the SpareBank 1 Alliance's separate legal vehicle established according to the specialist banking principle within the Norwegian legislation for covered bonds. The Company's purpose is to acquire residential mortgages from its ownership banks organised in the SpareBank 1 Alliance and finance these by issuing covered bonds.

SpareBank1 Boligkreditt main office is located in Stavanger, visiting address Bjergsted Terrasse 1.

These quarterly accounts for SpareBank 1 Boligkreditt refers to the period 01.01.2015 - 30.09.2015.  The accounts have been produced in accordance with IAS 34 reporting for a partial year. The accounts are prepared in accordance with IFRS and IFRIC interpretations thereof.  The Company's accounting principles and calculation methods have not materially changed since the annual accounts for 2014.  The principles adressed below should be seen in connection with the accounting principles as they were presented in the annual accounts for 2014. 

These financial accounts have been approved by the Board of Directors of SpareBank 1 Boligkreditt on 23.10.2015

1.2 Segment
Business segments are the Company's primary reporting segment.  The Company has only one segment, which is the retail customer segment.  The segment consists of lending to private individuals and all loans have been acquired from the member banks of the SpareBank 1 alliance.  The Company's total results as of the second quarter 2015 is therefore equal to the retail segment total results. 

1.3 Presentational Currency
The presentation currency is Norwegian Kroner (NOK), which is also the Company's functional currency. All amounts are given in NOK thousand unless otherwise stated. 

1.4 Risk Management
SpareBank 1 Boligkreditt AS' financial assets and liabilities fluctuates in value as a result of the variability of prices of such assets and liabilities in the financial markets.  In the annual accounts for 2014 Note 3 this risk and management thereof is more closely discussed.

1.5 Estimates and assessments regarding the use of accounting principles
The preparation of the financial information is in accordance with IFRS and involves management's estimates which affect the implementation of accounting principles and thereby accounting values for assets, liabilities, revenue and costs. These estimates have been described in the notes to the annual accounts for 2014.

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Note 2 Net Interest Income

NOK 1 000					30.09.2015	30.09.2014	2014
Interest income
Interest income and similar income from loans to and balances with credit institutions					208,677	137,890	205,278
Interest income and similar income from loans to and balances with customers					4,029,793	4,973,907	6,502,841
Interest income treasury bills					2,449	24,856	26,035
Commission expense (payable to shareholder banks) *					-1,294,898	-1,750,330	-2,258,058
Total interest income					2,946,021	3,386,323	4,476,095
Interest expense
Interest expense and similar expenses to credit institutions					26,117	30,303	40,085
Interest expense and similar expenses on issued bonds					2,549,733	3,017,230	3,970,238
Interest expense and similar expenses on issued certificates					1,735	40,834	48,067
Interest expense and similar expenses on Tier 2 capital					56,989	41,844	62,240
Other interest expenses					18	76	92
Total interest expense					2,634,592	3,130,288	4,120,722
Net interest income					311,429	256,035	355,372

 

* Commissions to our parent banks are calculated daily for each mortgage loan transferred. whereby the commission equals the customer loan rate less a rate which incorporates the Company's average cost of funding and operational costs. The operational add-on element is expressed through an average rate which is from time to time decided by the Company's Board of Directors.

 

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Note 3 Net Gains on Financial Instruments

NOK 1 000					30.09.2015	30.09.2014	2014
Net gains (losses) from financial liabilities					-839,343	-2,877,908	-4,464,177
Net gains (losses) from financial assets					-28,891	-55,119	234,442
Net gains (losses) from financial derivatives. hedging. at fair value					703,765	2,878,763	4,159,673
Net gains (losses) from valuation adjustment basis swap spread					379,836	-8,434	31,604
Netto gains (losses)					215,366	-62,699	-38,458

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Note 4 Salaries and Remuneration

NOK 1 000					30.09.2015	30.09.2014	2014
Salary					7,824	8,073	10,176
Salaries reinvoiced to SpareBank1 Næringskreditt*					-3,828	-4,288	-5,329
Pension expenses					1,376	1,656	1,783
Social insurance fees					1,240	1,197	1,611
Other personnel expenses					465	1,386	1,984
Total salary expenses					7,077	8,024	10,224
Average number of full time equivalents (FTEs)					7	8	8

 

* The company’s employees have shared employment between SpareBank 1 Næringskreditt and SpareBank 1 Boligkreditt. 

All remuneration is effectuated through SpareBank 1 Boligkreditt and a portion is reinvoiced to SpareBank 1 Næringskreditt.

The company also buys administrative services from SpareBank 1 SR-Bank ASA and SpareBank 1 Gruppen.

Pension benefit obligations are covered in SpareBank 1 Boligkreditt through participation in the pension fund of SpareBank 1 SR-Bank ASA.  This pension scheme meets the legal demands on mandatory occupational pension.

 

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Note 5 Administration Expenses

NOK 1 000					30.09.2015	30.09.2014	2014
IT operation and maintenance					7,281	6,062	8,080
Travel					725	503	1,037
Telephone and postage					106	90	163
Misc other adm expenses					1	12	19
cost share with SpareBank 1 Næringskreditt AS					-450	0	0
Total					7,664	6,667	9,299

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Note 6 Other Operating Expenses

NOK 1 000					30.09.2015	30.09.2014	2014
Auditing. hired personnel from SpareBank 1 Group. other services					6,652	8,836	12,162
Operating expenses rented offices					427	427	570
Operating expenses reinvoiced to SpareBank 1 Næringskreditt					-461	-624	-867
Misc other operating expenses					138	117	200
Total					6,756	8,756	12,064

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Note 7 Other Assets

NOK 1 000					30.09.2015	30.09.2014	2014
Intangible Assets					2,275	2,650	2,904
Account Reveivables from SpareBank 1 Næringskreditt AS					2,416	1,774	1,564
Total					4,692	4,424	4,468

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Note 8 Lending to Customers

Lending to customers are residential mortgages only. The mortgages generally have a loan lon-to-value and losses have been very low. The total amout of lending to customers at the end of the period were NOK 161 billion. All mortgages carry a variable interest rate.

NOK 1 000					30.09.2015	30.09.2014	2014
Revolving loans - retail market					54,058,759	57,013,070	56,465,882
Amortising loans - retail market					111,997,128	102,632,280	104,560,477
Accrued interest					153,028	182,731	186,630
Total loans before specified and unspecified loss provisions					166,208,914	159,828,081	161,212,990
Specified loan loss provisions						-	-
Unspecified loan loss provisions					7,708	7,708	7,708
Total net loans and claims with customers					166,201,206	159,820,373	161,205,282
Liability
Unused balances under customer revolving credit lines (flexible loans)					19,669,699	19,042,899	19,210,784
Total					19,669,699	19,042,899	19,210,784
Defaulted loans
Defaults*					0.0%	0.0%	0.0%
Specified loan loss provisions					0.0%	0.0%	0.0%
Net defaulted loans					0.0%	0.0%	0.0%
Loans at risk of loss
Loans not defaulted but at risk of loss					0.0%	0.0%	0.0%
- Write downs on loans at risk of loss					0.0%	0.0%	0.0%
Net other loans at risk of loss					0.0%	0.0%	0.0%

 

*The entire customer loan balance is considered to be in default and will be included in overviews of defaulted loans when overdue instalments and interest payments are not received within 90 days or if credit limits on revolving loans are exceeded for 90 days or more

 

Changes to loan loss provisions

NOK 1 000					30.09.2015	30.09.2014	2014
Loan loss provisions starting balance					7,708	7,708	7,708
Change in group loan loss provisions					0	0	0
Loan loss provisions ending balance					7,708	7,708	7,708

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Note 9 Equity capital and shareholders

Shareholders registry as of 30.09.2015					No. Of shares	Onwership	Vote
SpareBank 1 SR-Bank ASA					11,076,409	20.10%	20.10%
SpareBank 1 SMN					9,737,324	17.67%	17.67%
SpareBank 1 Nord-Norge					8,106,030	14.71%	14.71%
Bank 1 Oslo Akershus AS					5,155,681	9.36%	9.36%
Sparebanken Hedmark					5,237,544	9.50%	9.50%
BN Bank ASA					3,027,817	5.49%	5.49%
SpareBank 1 BV					2,401,168	4.36%	4.36%
SpareBank 1 Østfold Akershus					2,260,849	4.10%	4.10%
Sparebanken Telemark					1,984,188	3.60%	3.60%
SpareBank 1 Ringerike Hadeland					1,732,419	3.14%	3.14%
SpareBank 1 Nordvest					1,142,663	2.07%	2.07%
Modum Sparebank					621,718	1.13%	1.13%
SpareBank 1 Søre Sunnmøre					658,498	1.19%	1.19%
SpareBank 1 Nøtterøy Tønsberg					610,450	1.11%	1.11%
SpareBank 1 Hallingdal					609,581	1.11%	1.11%
SpareBank 1 Gudbrandsdal					457,534	0.83%	0.83%
Lom og Skjåk Sparebank					285,609	0.52%	0.52%
Totalt					55,105,482	100%	100%

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Note 10 Liabilities incurred by issuing securities

NOK 1 000					Nominal value* 30.09.2015	Nominal value 30.09.2014	Nominal value 2014
Short term notes. unsecured					-	1,825,000	750,000
Repurchased short term notes. unsecured					-	-	-
Senior unsecured bonds					6,701,000	6,100,000	6,950,000
Repurchased senior unsecured bonds					-38,000	-	-
Covered bonds					161,367,960	152,477,623	153,214,115
Repurchased Covered bonds					-4,038,370	-1,911,007	-1,611,552
Total debt incurred by issuing securities					163,992,590	158,491,616	159,302,563

 

* Nominal value is incurred debt at exchange rates (EUR/NOK and USD/NOK) at the time of issuance

 

NOK 1 000					Book value 30.09.2015	Book value 30.09.2014	Book value 2014
Short term notes. unsecured					-	1,824,851	749,969
Repurchased short term notes. unsecured					-	-	-
Senior unsecured bonds					6,700,618	6,098,560	6,948,228
Repurchased senior unsecured bonds					-38,036	-	-
Covered bonds					197,254,281	165,623,930	181,117,727
Repurchased covered bonds					-4,248,583	-2,072,916	-1,825,486
Activated costs incurred by issuing debt					-146,547	-158,515	-148,534
Accrued interest					1,881,784	1,725,848	1,877,586
Total debt incurred by issuing securities					201,403,517	173,041,758	188,719,491

 

Liabilities categorized by debt instrument and year of maturity (nominal value*. net of repurchased bonds) NOK 1.000:

 

Senior Unsecured Bonds

Due in	30.09.2015	30.09.2014	2014
2014	-	800,000	-
2015	225,000	2,525,000	1,700,000
2016	3,788,000	4,600,000	5,750,000
2017	2,650,000	-	250,000
Total	6,663,000	7,925,000	7,700,000

Covered bonds

Due in	30.09.2015	30.09.2014	2014
2014	-	1,411,000	-
2015	-	10,515,698	10,032,698
2016	22,360,625	25,655,625	25,975,625
2017	21,013,000	21,013,000	21,013,000
2018	21,785,000	21,785,000	21,785,000
2019	25,410,598	25,384,732	25,481,150
2020	24,458,500	21,878,500	24,128,500
2021	25,385,435	15,631,557	15,759,760
2022	12,648,750	3,233,750	3,233,750
2023	-	-	-
2024	1,444,882	1,234,954	1,370,280
2025	1,010,000	1,010,000	1,010,000
2026	1,650,000	1,650,000	1,650,000
2027	-	-	-
2028	162,800	162,800	162,800
Sum	157,329,590	150,566,616	151,602,563
Total	163,992,590	158,491,616	159,302,563

 

* Nominal value is incurred debt at exchange rates (EUR/NOK and USD/NOK) at the time of issuance

 

Debt incurred by currency (book values at the end of the period)

NOK 1 000					30.09.2015	30.09.2014	2014
NOK					56,133,687	52,671,974	53,495,067
EUR					104,415,444	89,686,433	99,956,242
USD					40,575,319	30,445,191	35,001,278
SEK					279,068	238,159	266,905
Total					201,403,517	173,041,757	188,719,491

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Note 11 Subordinated Debt

NOK 1000	ISIN	Issued year	Nominal amount		30.09.2015	30.09.2014	2014
Tier 2 subordinated notes	NO0010704109	2014	1,600,000		1,603,627	1,604,058	1,604,128
Additional Tier 1 capital notes	NO0010713746	2014	350,000		350,251	350279	350134
Additional Tier 1 capital notes	NO0010745920	2015	300,000		300,321	-	-
Additional Tier 1 capital notes	NO0010746191	2015	180,000		180,047	-	-
Book value			2,430,000		2,434,246	1,954,337	1,954,262

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Note 12 Financial Derivatives

NOK 1 000					30.09.2015	30.09.2014	2014
Interest rate derivative contracts
Interest rate swaps
Nominal amount					77,915,816	71,521,563	60,000,110
Asset					5,637,833	5,337,817	6,076,849
Liability					-381,431	-726,329	-778,250
Currency derivative contracts
Currency swaps
Nominal amount					135,100,163	111,858,355	125,117,673
Asset					31,835,744	9,465,546	23,638,212
Liability					-11,567	-34,614	-46,793
Total financial derivative contracts
Nominal amount					213,015,979	183,379,918	185,117,783
Asset					37,473,577	14,803,363	29,715,061
Liability *					-392,999	-760,943	-825,043
All derivative contracts exist for the purpose of hedging changes in interest rates and currency exchange rates.
Asset					37,473,577	-760,943	29,715,061
Net gain (loss) on valuation adjustment of basis swap spreads					411,440	-8,434	31,604
Net asset derivatives					37,885,017	-769,377	29,746,665

 

Basis swaps are currency swaps and are entered into at a certain cost (spread) between SpareBank 1 Boligkreditt and banks which offer such swaps and which have signed an ISDA agreement with the Company.  Changes in the cost are valued each quarter across all of the Comapny's swaps in accordance with the IFRS rules. An increase in the cost would result in an increase in the value of the basisswaps while a cost decrease would reduce the value of the basis swaps. The effect may be material from quarter to quarter because the Company's portfolio of swaps is extensive.  All basisswap value changes will reverse over time towards the point of termination of the swaps.

 

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Note 13 Classification of Financial Instruments

NOK 1 000			Financial instr.accounted for at fair value *	Financial assets and debt at amortised cost	Financial assets held to maturity	Non-financial assets and liabilities	30.09.15
Assets
Deposits in financial institutions			-	16,896,170	-	-	16,896,170
Norwegian government short term debt			-	-	-	-	0
Bonds			28,297,849	-	225,079	-	28,522,929
Lending to customers			-	166,201,206	-	-	166,201,206
Financial derivatives			37,885,017	-	-	-	37,885,017
Other assets			-	-	-	4,692	4,692
Total Assets			66,182,866	183,097,376	225,079	4,692	249,510,013
Liabilities
Debt incurred by issuing securities			161,719,935	39,683,582	-	-	201,403,517
Collateral received in relation to financial derivatives			-	35,800,968	-	-	35,800,968
Financial derivatives			392,999	-	-	-	392,999
Deferred taxes			-	-	-	234,604	234,604
Taxes payable			-	-	-	-	-
Tier 2 capital			-	2,434,246	-	-	2,434,246
Other liabilities			-	-	-	305,434	305,434
Total Liabilities			162,112,933	77,918,795	-	540,038	240,571,767
Total Equity			-	-	-	8,938,246	8,938,246
Total Liabilities and Equity			162,112,933	77,918,795	-	9,478,284	249,510,013

 

*Fair value calculation according to changes in market interest rates and currencies exchange rates

 

NOK 1 000			Financial instr.accounted for at fair value *	Financial assets and debt at amortised cost	Financial assets held to maturity	Non-financial assets and liabilities	30.09.14
Assets
Deposits in financial institutions			-	9,637,332	-	-	9,637,332
Norwegian government short term debt			297,525	-	-	-	297,525
Bonds			12,843,525	-	890,509	-	13,734,034
Lending to customers			-	159,820,373	-	-	159,820,373
Financial derivatives			14,803,363	-	-	-	14,803,363
Other assets			-	-	-	4,424	4,424
Total Assets			27,944,413	169,457,705	890,509	4,424	198,297,051
Liabilities
Debt incurred by issuing securities			134,225,131	38,816,626	-	-	173,041,757
Collateral received in relation to financial derivatives			-	11,921,491	-	-	11,921,491
Financial derivatives			769,378	-	-	-	769,378
Deferred taxes			-	-	-	157,770	157,770
Taxes payable			-	-	-	-	-
Tier 2 capital			-	1,954,337	-	-	1,954,337
Other liabilities			-	-	-	2,055,098	2,055,098
Total Liabilities			134,994,509	52,692,454	-	2,212,868	189,899,831
Total Equity			-	-	-	8,397,220	8,397,220
Total Liabilities and Equity			134,994,509	52,692,454	-	10,610,088	198,297,051

 

*Fair value calculation according to changes in market interest rates and currencies exchange rates

 

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Note 14 Financial Instruments at Fair Value

Methods in order to determine fair value

Generelt
The interest rate curve that is used as input for fair value valuations of hedging instruments and hedging objects consists of the NIBOR-curve for maturities less than one year. The swap-curve is used for maturities exceeding one year.

Interest rate swaps

Valuation of interest rate swaps at fair value is done through discounting future cash flows to their present values.  Valuation of currency swaps will also include the element of foreign exchange rates

Bonds

Valuation of bonds at fair value is done through discounting future cash flows to present value. 

With effect from 2009 SpareBank 1 Boligkreditt AS has implemented the changes in IFRS 7 in relation to the valuation of financial instruments as of the date of the financial accounts. The changes require a presentation of the fair value measurement for each Level.  We have the following three Levels for the fair value measurement: 

Level 1: Valuation based on quoted prices in an active market

Fair value of financial instruments which are traded in active markets are based on the market price at the balance sheet date. A market is considered to be active if the market prices are easily and readily available from an exchange, dealer, broker, industry group, pricing service or regulating authority and that these prices represent actual and regular market transactions on an arm's length basis. In this category are, amongst others, debt certificates and covered bonds listed on an exchange in the Eurozone and the US. 

Level 2: Valuation based on observable factors

Level 2 consist of instruments which are valued using information which is not listed prices, but where the prices are directky or indirectly observable for assets or liabilities or, and which also include prices in active markets. In this category are included covered bonds issued in NOK and listed on the Oslo stock exchange or ABM.  The valuation of these instruments are largely affected by the change in interest rate curves and credit spreads.  Where prices are not directly observable these have been derived from observable interest rate curves and credit spreads produced by the Association of Fund Managers (VFF). 

Level 3: Valuation based on other than observable factors

If valuations according to Level 1 or Level 2 are not available, valuations are based on not-observable information.  The Company has as a matter of principle neither assets nor liabilities which are valued at this level. 

The following table present the company’s assets and liabilities at fair value as of 30.09.2015

NOK 1 000				Level 1	Level 2	Level 3	Total
Bonds and bills				22,097,884	6,199,965	-	28,297,849
Financial Derivatives				-	37,885,017	-	37,885,017
Total Assets				22,097,884	44,084,982	-	66,182,866
Bonds				-	161,719,935	-	161,719,935
Financial Derivatives				-	392,999	-	392,999
Total Liabilities				-	162,112,933	-	162,112,933

The following table present the company’s assets and liabilities at fair value as of 30.09.2014

NOK 1 000				Level 1	Level 2	Level 3	Total
Bonds and bills				5,559,521	7,581,529	-	13,141,050
Financial Derivatives				-	14,803,363	-	14,803,363
Total Assets				5,559,521	22,384,892	-	27,944,413
Bonds				-	134,225,131	-	134,225,131
Financial Derivatives				-	769,378	-	769,378
Total Liabilities				-	134,994,509	-	134,994,509

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Note 15 Bonds classified as Hold to Maturity

As of 30.09.2015

Bonds classified as		Book value 42005	Investments	Matured	Amortizing	Exchange rate effects	Amortized cost 30.09.2015
Hold to maturity		790,215	-	565,000	-136	-	225,079
Total certificates and bonds		790,215	-	565,000	-136	-	225,079

Market value of bonds in hold to maturity portfolio

Bonds classified as			Book value	Market value incl. currency effect	Market value incl. currency effect
Hold to maturity			225,079	226,167	1,088
Total certificates and bonds			225,079	226,167	1,088

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Note 16 Other Liabilities

NOK 1 000					30.09.15	30.09.14	2014
Employees tax deductions and other deductions					-479	331	867
Employers national insurance contribution					-202	215	411
Accrued holiday allowance					-699	767	1,055
Commission payable to shareholder banks					-127,554	1,977,789	164,329
Deposits*					-13,566	11,195	14,209
Pension liabilities					-19,185	13,131	18,935
Other accrued costs					-136,820	55,510	5,030
Total					-298,506	2,058,937	204,836

 

The Company does not have an overdraft facility or a revolving credit facility

* Deposits represents temporary balances paid in by customers in excess of the original loan amount

 

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Note 17 Asset coverage test

The asset coverage is calculated according to the Financial Services Act § 2-31 (Covered Bond Legislation). There is a discrepancy between the asset coverage test and the amounts in the balance sheet because for the purposes of the test mortgage loans which may have migrated above the 75% loan to value level are reduced to reflect the decrease in the value of the underlying collateral so that only a maximum loan corresponding to a value of 75% of the collateral is considered. Furthermore, the fact that market values are recorded for all bonds and certificates in the cover pool could have an impact. In addition any defaulted loans, i.e. loans in arrears at or beyond 90 days, are excluded from the test (there have been no occurances of any defaults since commencement of operations).

NOK 1 000					30.09.15	30.09.14	2014
Covered Bonds					199,137,473	167,325,802	182,989,799
Repurchased Bonds					-4,265,659	-2,078,797	-1,843,388
Derivatives					-37,133,385	-14,194,052	-29,035,167
Total Covered Bonds					157,738,429	151,052,954	152,111,244
Lending to customers					165,829,470	159,553,933	160,919,570
Treasury Bills					0	297,525	487,554
Substitute collateral					9,638,149	11,268,071	8,792,087
Total Cover Pool					175,467,618	171,119,528	170,199,210
Asset-coverage					111,2%	113,3%	111,9%

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Note 18 Capital Adequacy

The primary goal for the Company's management of capital reserves is to ensure compliance with laws and regulatory requirements and maintain solid financial ratios and a high quality credit assessment in order to best support its business.

A new capital requirements directive was introduced in Norway as of January 1. 2007 (Basel II). SpareBank1 Boligkreditt AS obtained permission from the Financial Services Authority in Norway (Finanstilsynet) for the implementation of its own Internal Ratings Based (IRB) model for credit risks from the seond quarter of 2009.

Transitional rules have been implemented by the FSA whereby regulated financial institutions with approved IRB models will not be able to fully benefit from the results of such models until the year 2018. Regulated entities are allowed to reduce by 20% the total sum of risk weighted assets which would otherwise have been in place under the previous Basel I framework. In the following years until the end of 2017. the transitional rules will lead to significantly higher capital requirements than what would otherwise have been applicable under Basel II.

The European Union has approved new regulatory requirements. CRD IV. The new regulations places more robust requirements on capital adequacy. capital structure. liquidity buffers and funding. CRD IV is gradually introduced in Norway up until the end of 2016. The requirement of 13.5% total capital from July 1. 2014 includes a 10% Core Tier 1 capital and 3.5% other capital. A new calculation for capital adequacy (CRD IV) is introduced for SpareBank 1 Boligkreditt from the 3rd quarter 2014.

The parent banks have committed themselves to pay in additional capital if the Company's Core Tier 1 capital should decline below 9%. Individual bank additional amounts are determined by the pro rata ownership shares. and if not sufficient. the banks are required to pay in an amount up to twice the pro-rata based individual amounts.

Capital i NOK 1 000					30.09.15	30.09.14	2014
Share capital					5,510,548	5,510,548	5,510,548
Premium share fund					2,757,922	2,757,922	2,757,922
Other equity capital					302,039	5,626	205,928
Total equity capital					8,570,509	8,274,096	8,474,398
Intangible assets					-2,275	-2,650	-2,904
Declared share dividend					-	-	-203,890
Additional Tier 1 capital					830,000	350,000	350,000
100% deduction of expected losses exceeding loss provisions IRB (CRD IV)					-316,059	-268,776	-272,755
Additional prudent valuation adjustment (AVA)					-66,801	-28,705	-50,940
Core capital (Tier 1)					9,015,374	8,323,965	8,293,909
Tier 2 capital					1,600,000	1,600,000	1,600,000
Total capital					10,615,374	9,923,965	9,893,909

Minimum requirements for capital according to Basel II i NOK 1 000					30.09.15	30.09.14	2014
Credit risk					3,123,558	2,878,600	2,894,117
Market risk					-	-	-
Operational risk					41,779	35,713	35,713
Depreciation on groups of loans					-	-	-
CVA Risk					126,289	380,995	148,400
Difference in capital requirement due to the Basel I transitional floor					2,461,538	2,086,132	2,538,910
Minimum requirement for capital					5,753,164	5,381,440	5,617,140

Capital coverage

					30.09.15	30.09.14	2014
Risk weighted assets incl. transitional rule					72,313,358	67,267,998	70,214,246
Total capital coverage (%)					14,76%	14,75%	14,09%
Tier 1 capital coverage (%)					12,54%	12,37%	11,81%
Core Tier 1 capital coverage (%)					11,38%	11,85%	11,31%

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Note 19 Related parties

Transactions with related parties
The Company has 166 209 MNOK loans to customers. These are acquired from shareholder banks at market value (i.e. nominal value).

SpareBank 1 SR-Bank ASA
The Company purchases a substantial amount of their support functions from SpareBank 1 SR-Bank ASA.

A Service Level Agreements (SLA) is established between the Company and SpareBank 1 SR-Bank ASA.

SpareBank 1 Alliance
The Company has a Transfer and Servicing agreement in place with each individual shareholder bank regulating amongst other things the servicing of mortgage loans.

SpareBank 1 Næringskreditt AS
All SpareBank 1 Boligkreditt AS's employees are also employed by SpareBank 1 Næringskreditt AS.  In accordance with a Board decision in SpareBank 1 Næringskreditt dated 17.09.09 one third of the administrative expenses in SpareBank 1 Boligkreditt AS are to be charged to SpareBank 1 Næringskreditt AS. This division of administrative expenses between the two companies reflect the actual resources utilisation in SpareBank 1 Boligkredit AS.

Note 20 Contingencies

SpareBank 1 Boligkreditt AS is not a party to any ongoing legal proceedings.

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Note 21 Collateral received

SpareBank 1 Boligkreditt has signed ISDA-agreements including CSAs (Credit Support Annexes) with a number of financial institutions that are counterparties in interest rate and currency swaps. These agreements are one-sided, which means that counterparties post collateral in the form of cash deposits to SpareBank 1 Boligkreditt depending on the movement in market rates and the ratings levels of the counterparties . At the end of the period 30.09.2015 this collateral amounted to NOK 35 801 million.